As major central banks begin to cut benchmark yields, borrowers are weighing opportunities to refinance. While even lower yields may come to those who wait, many have chosen to take advantage of current financing conditions and refinance now.

Although issuers have made substantial progress reducing near term maturities during the past nine months, maturities rise through 2028. Global corporate debt maturing in 2025 has come down by 11% since the beginning of 2024, led by a 41% decline in the amount of speculative-grade nonfinancial debt coming due. But these maturities are coming down from a higher level, as more debt is slated to mature in 2025 than was in 2024.

Even though we now estimate that more debt is scheduled to mature over the next 12 months than as at the beginning of 2024, this appears manageable in light of recent capital market activity. We expect that $2.14 trillion in rated debt is scheduled to mature over the next 12 months (from Oct. 1, 2024 -Sept. 30, 2025), 88% of which is investment-grade. For comparison, issuance of corporate bonds and leveraged loans over the past 12 months (through the third quarter 2024) surpassed $3.5 trillion, according to Refinitiv and PitchBook LCD.

Many borrowers are opting to refinance now, instead of waiting for further expected rate cuts, they're taking the opportunity presented by accommodative financing conditions to get ahead of upcoming maturities. Bond issuance year-to-date (through the third quarter) is up 22% for investment-grade and 77% for speculative-grade, while leveraged loan volume has more than doubled. Among the speculative-grade the majority of this issuance is going for refinancing.

While the pace of issuance slowed modestly for speculative-grade bonds and leveraged loans in the third quarter, volumes remained considerably higher than in third quarter 2023. In another sign of how financing conditions remain accommodative, investment-grade credit spreads tightened to a 20-year low, while speculative-grade neared lows from 2007.

We based our analysis on a review of debt instruments rated by S&P Global Ratings and issued by financial and nonfinancial corporate borrowers globally. Debt amounts have been aggregated by issue credit rating, and regional breakouts are aggregated by the parent's country of incorporation.

Near-Term Maturities Ease The Most Among Lower-Rated And U.S. Issuers

• Financial and nonfinancial corporate debt maturities are set to peak in 2028, unchanged from last quarter, with $2.82 trillion coming due.
• 2025 maturities have fallen by 11% since the beginning of this year, and the pace of this reduction remained steady in the third quarter, even with the slight slowdown in issuance quarter on quarter.
• This issuance supported a 41% reduction in speculative-grade nonfinancial debt maturing in 2025, more pronounced than the investment-grade decline.
• Speculative-grade maturities for 2026 and 2027 have also eased (by 24.9% and 10.4%, respectively) since the beginning of the year.
• Investment-grade rated maturities for 2026 and 2027 rose during the first nine months of the year, largely driven by financial institutions' medium-term debt issuances.

Chart 1

The upcoming maturity schedules looks quite different for investment- and speculative-grade rated debt.

• Investment-grade maturities peak in 2026 and then gradually decline through 2029.
• Speculative-grade maturities climb steadily through 2027, then rise sharply to their peak in 2028.
• By region, maturities in the U.S. peak in 2028, while European maturities peak first in 2026. This largely reflects the larger concentrations of speculative-grade debt in the U.S. and financial services debt, which is largely investment-grade, in Europe.

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Table 1

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Table 2

Funding Costs Are Improving, But Still Higher For Now

After the rapid increase in benchmark rates in 2022 and 2023, much of the debt that is now approaching maturity was issued back when rates were lower. Even though benchmark rates are starting to come down, issuers refinancing fixed-rate debt (like bonds and notes) still likely face higher yields on their new debt.

• Tightening spreads contributed to a slight decline in primary market yields in the third quarter for 'BBB' bonds in the U.S. and Europe, and for 'BB' bonds in the U.S.
• By contrast, European 'BB' bond yields rose by just over a percentage point. A greater share of European 'BB' bond issuance in the third quarter consisted of 144A private placements, which tend to have higher yields than public market issues.
• Across U.S. and European 'BB' rated bonds, the median coupon of bonds maturing in 2025 has declined slightly since July 1, 2024, as the higher-yielding issues may have already been refinanced.

• In the U.S., borrowers could see a 1.3-percentage-point increase in the yields on both 'BBB' and 'BB' bonds maturing in 2025, based on recent new-issue yields.
• This difference between current yields and the yields on U.S. 'BBB' bonds maturing in 2025 has fallen by about 40 basis points since April 1, 2024, while the difference in yields for 'BB' bonds is basically changed.
• In Europe, borrowers could see a 1.9-percentage-point increase in the 'BBB' yields for bonds maturing in 2025, based on recent new-issue yields, and this difference between current yields and maturing debt is basically unchanged since our estimate from April 1, 2024.
• By contrast, European 'BB's could see a larger increase of 3.4-percentage-points in yields for bonds maturing in 2025, which is up about a quarter percentage point since April 1, 2024, as the median yield on a 'BB' bond maturing in 2025 has since fallen.

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Debt Expanded For Both Financial Services And Nonfinancial Corporates

• Total global rated corporate debt outstanding was $24.27 trillion as of Oct. 1, 2024, up 3.2% since the beginning of the year.
• Nonfinancial issuers account for the majority of this debt, (63.2%), while financial services issuers account for the remaining 36.8%.
• Financial services debt outstanding grew at a faster pace (at 3.9% year-to-date) than nonfinancial corporate debt (at 2.8%).
• Both investment-grade and speculative-grade debt outstanding increased year-to-date, by $558.7 billion and $198.4 billion, respectively.

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Table 3

U.S.: Pronounced Reductions In Lower-Rated Debt

• U.S. corporate debt totaled $12.3 trillion as of Oct. 1, 2024, and about half ($6.1 trillion) matures through 2029.
• U.S. issuers have considerably reduced near-term maturities throughout 2024: 2025 maturities are down by 19.2% (to $889 billion) and 2026 maturities are down 6.6% (to $1.2 trillion).
• This reduction has been more pronounced among lower-rated issuers: speculative-grade debt maturing in 2025 has fallen by half since the beginning of 2024.
• U.S. maturities peak in 2028, when $1.47 trillion in rated debt is scheduled to mature, which marks the first year speculative-grade maturities are set to exceed investment-grade.
• The nonfinancial sectors with the largest amounts of debt due through 2029 are media and entertainment ($581.5 billion), high technology ($535.3 billion), and health care ($475 billion).
• The transportation sector has a considerable decline in the amount of debt maturing through 2029 (down 47% since Jan. 1, 2024), largely reflecting the reclassification of several aircraft leasing issuers from the transportation to the financial institutions sector.
• By rating, the 'BBB' category is the largest, representing 36% of the nonfinancial debt maturing through 2029.

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Table 4

Europe: Nearer Terms, But More Investment-Grade

• European corporate debt as of Oct. 1, 2024, totaled $8.42 trillion, 57% of which is scheduled to mature through 2029.
• European issuers have made progress reducing maturities through next year: 2025 maturities are down by 9.1% (to $874 billion), while 2026 maturities are largely unchanged.
• Compared with the U.S., a much higher share of maturities through 2029 are financial services debt--48% in Europe compared with 26% in the U.S.
• In part, this reflects the central role that banks continue to play as funding providers for small and midsize borrowers in Europe. In the U.S., the larger nonfinancial sector reflects its highly developed capital markets and high degree of banking disintermediation.
• European nonfinancial debt coming to maturity through 2029 amounts to $2.49 trillion, and this is largely investment-grade (64%).
• Total European maturities peak in 2026, led by financial services' maturities, and 83% of the debt maturing in 2026 is investment-grade.
• As in the U.S., European nonfinancial corporate maturities peak in 2028, and speculative-grade nonfinancial maturities are slated to exceed investment-grade nonfinancials in 2028.
• Nonfinancial sectors with the most debt maturing through 2029 include: Consumer products ($366.1 billion), telecommunications ($292.7 billion), and auto ($264.1 billion).
• Among these, the telecommunications sector has the most speculative-grade debt set to mature (with $165 billion), representing nearly 56% of the sector's debt.

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Table 5

Emerging Markets: Maturity Wall Peaks In 2025

• Total emerging markets debt outstanding was $696.3 billion as of Oct. 1, 2024, 51% of which matures through 2029.
• While the maturity wall peaks in 2025 at $80.5 billion, more than 80% of this is investment-grade. Much of it consists of debt from the oil and gas and financial institutions sectors.
• Emerging markets borrowers have pushed back a smaller proportion of near-term maturities than the U.S. or Europe. By Oct. 1 of this year, 2025 maturities declined 5.0% from Jan. 1, 2024, and 2026 maturities were just modestly lower.
• The majority of debt coming to maturity through 2029 is rated investment-grade (73.7%) and about 83% is denominated in U.S. dollars.

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Data Approach

We estimated maturities and potential refunding needs of financial and nonfinancial corporate debt rated by S&P Global Ratings, aggregated by issue credit rating.

For each region, we included the rated debt instruments of all parent companies and their foreign subsidiaries. We counted the debt of all these companies regardless of the currency or market in which the debt was issued. We converted any non-U.S.-dollar-denominated debt to U.S. dollars based on the exchange rates on Oct. 1, 2024.

The issue types covered include loans, revolving credit facilities, bank notes, bonds, debentures, convertible bonds, covered bonds, intermediate notes, medium-term notes, index-linked notes, equipment pass-through certificates, and preferred stock. In the case of revolving credit facilities, the amount usually represents the original facility limit, not necessarily the amount that has been drawn. Debt amounts are tallied as the face value of outstanding rated debt instruments.

We excluded individual issues that are not currently rated at the instrument level, as well as instruments from issuers currently rated 'D' (default) or 'SD' (selective default). We expect the credit market will have already accommodated some of the debt remaining in this year, given normal data-reporting lags.

We also aggregated sector-specific data according to the subsector of the issuer. The financial sector is defined as all banks, brokers, insurance companies, asset managers, mortgage companies, and other financial institutions. We aggregated debt issued by financial arms of nonfinancial companies with the sector of the corporate parent. We excluded government-sponsored agencies such as Fannie Mae and Freddie Mac, project finance, and public finance issuers.

In this study, we've aggregated maturity data into the following regions: U.S., Europe, rest of world, and emerging markets. We define those regions as follows:

U.S.:  U.S., American Somoa (U.S.), Bermuda, Cayman Islands, Guam (U.S.), N. Mariana Islands (U.S.), Puerto Rico, and U.S. Virgin Islands.

Europe:  Andorra, Anguilla (U.K.), Austria, Belgium, British Virgin Islands, British Indian Ocean Territory, Channel Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Falkland Islands (U.K.), Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Greenland, Guernsey, Holy See (Vatican City), Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mayotte (France), Monaco, Montserrat, Netherlands, Netherland Antilles, New Caledonia (France), Norway, Portugal, Reunion (France), San Marino, Sint Maarten (Dutch Part), Slovak Republic, Slovenia, Spain, St. Helena (U.K.), St. Pierre/Miquelon (France), Svalbard/Jan Mayer Islands (Norway), Sweden, Switzerland, U.K., and Wallis/Futuna Islands (France).

Rest of world:  Any country not included in either the U.S. or Europe.

Emerging markets (or EM-18):  Argentina, Brazil, Chile, China, Colombia, Hungary, India, Indonesia, Malaysia, Mexico, Peru, Philippines, Poland, Saudi Arabia, South Africa, Thailand, Vietnam, and Turkiye.

Related Research

• Global Financing Conditions: Blockbuster Growth In 2024 With Tailwinds Heading Into 2025, Oct. 23, 2024